5. Round Number Breakout

Entry Logic

Price closes above/below a psychological round number (e.g., 100, 1.2000, 10000). Confirmation is a subsequent candle closing above/below the round number. Timeframe is 1-minute or 5-minute. Entry is at the confirmation candle's close. Market condition is trending or volatile.

Exit Logic

Target is 1.2x initial risk. Scale out 50% at 0.8R. Trailing stop 0.4 ATR from prior candle high/low. Signal failure: price re-crosses round number. Time expiration: no target reached within 45 minutes. Momentum loss: 2 consecutive candles fail to extend.

Stop Loss Structure

Hard stop 3-7 ticks beyond the broken round number. Max dollar loss $100 per trade. Max percent loss 0.75% of account. Structural stop at the 9-period EMA.

Risk Management Framework

Risk 0.5% of account per trade. Daily loss limit 2%. Weekly loss limit 6%. R:R requirement 1.2:1 minimum.

Position Sizing Model

Size based on stop loss distance. Volatility adjustment: smaller size for faster markets. Conviction sizing: 0.75% risk for A+ setups. Scale in: no. Scale out: yes, at 0.8R.

Trade Filtering

Market conditions: high volatility, fast-moving. Setups: clear breaks of major round numbers. Instruments: ES, NQ, CL, EURUSD. Time restrictions: avoid low volume periods. Chop avoidance: avoid narrow ranges. News avoidance: avoid 5 minutes before/after news.

Context Framework

Trend direction: breakout aligns with short-term trend. VWAP relationship: price breaks above/below VWAP. MA relationship: price breaks 9-period EMA. Range location: breakout from consolidation near round number. Higher TF: 15-minute chart shows momentum.

Trade Management Rules

Move to breakeven after 0.5R profit. Scale out 50% at 0.8R. Do not add size. Fast moves: tighten stop to 0.2 ATR. Slow moves: allow 0.4 ATR.

Time Rules

Optimal window: 9:30 AM - 10:00 AM EST, 1:00 PM - 1:30 PM EST. Times to avoid: 11:00 AM - 1:00 PM EST. Session notes: Market open, early afternoon.

Setup Classification

A+: Strong volume breakout, clear rejection of round number, aligned with short-term momentum. A: Good volume, clean break, generally aligned with momentum. B: Average volume, some hesitation, unclear momentum. C: Low volume, choppy break, no momentum.

Market Selection Criteria

Instruments: ES, NQ, EURUSD, GBPUSD. Volume: very high liquidity. Volatility: ATR(14) > 0.2% of price.

Statistical Edge Metrics

Win rate: 55-60%. Avg win: 1.1R. Avg loss: 1R. Profit factor: 1.1-1.2. Expectancy: 0.05-0.1R.

Failure Conditions

Fake out, price reverses quickly. Lack of follow-through. Price consolidates at round number.

Psychological Rules

Act decisively. Do not overthink. Manage emotions in fast markets.

Advanced Components

Regime detection: use volume profile to confirm support/resistance. Filters: order flow analysis. Correlation: monitor related pairs/futures. MTF alignment: 5-minute candle confirms break.

Location

Strongest: During high volatility periods. Weakest: In thin markets.